Recommendations for lifting barriers to private investment in young firms

12-04-2017
Sahwa
Recommendations for lifting barriers to private investment in young firms

MENA countries are urged to restore their balance of payments to overcome the social and economic challenges which have led to the recent political movements. With tourism and FDI having decreased over the last year, industrial competitiveness and capacity to export become a central issue. Capitalising on the vivid new entrepreneurial scene developing in all countries becomes part of the solution to developing innovation and creating fast-growing companies able to grow on the international markets.

In MENA, young entrepreneurs often complain about a lack of access to finance and by contrast, investors report meeting difficulties sourcing high quality mature projects. Indeed many of these entrepreneurs lack the managerial capacities to grow their businesses. National and international (notably diaspora) private individual investors could play a major role in overcoming these challenges of access to finance and technology, mentoring entrepreneurs and helping them access foreign markets.

Business angel networks and crowdfunding investment platforms are instruments likely to enlarge the volume of potential individual investors in young firms because they offer mutualisation mechanisms which reduce the risk taken by these investors. To develop in the region, these instruments need conducive legal frameworks and support policies, both which are lacking in most countries at the moment.

This paper will give a short overview of the policy and market context in selected countries and propose a set of recommendations to favour the development of these new investment mechanisms.